Key Highlights

● New-vehicle gross profit per unit dropped 18% to 2,896 dollars from 3,543 dollars.

● Used-vehicle retail gross profit per unit rose 16% to 2,002 dollars.

● First-half net income of 302.4 million dollars included a 125.8 million dollar divestiture gain.

● About 70% of stores have moved to the Tekion dealership management system.

Asbury Automotive Group Inc (NYSE:ABG), the US dealership group listed on the New York Stock Exchange as ABG, reported second-quarter 2026 results on 28 July 2026. Total revenue was 4,384.6 million US dollars for the quarter ended 30 June, almost unchanged from 4,373.1 million a year earlier. Profit, however, moved lower. Income from operations fell to 219.5 million dollars from 257.4 million, net income was 114.6 million dollars against 152.8 million, and diluted earnings per share were 6.25 dollars compared with 7.76 dollars. On the company's adjusted, non-GAAP basis, diluted earnings per share were 6.82 dollars against 7.43 dollars.

What drove the margin squeeze

Gross profit was broadly flat at 753.1 million dollars, so the decline came further down the income statement. On a same-store basis, which strips out dealerships bought or sold, revenue fell 7 per cent to 3,764.8 million dollars and gross profit fell 7 per cent to 643.2 million. New-vehicle gross profit per unit dropped 18 per cent to 2,896 dollars from 3,543 dollars. Selling, general and administrative expense rose to 66.4 per cent of same-store gross profit from 62.8 per cent a year earlier, and the group operating margin eased to 5.0 per cent from 5.9 per cent.

Other lines were more resilient. Used-vehicle retail gross profit per unit rose 16 per cent on a consolidated basis to 2,002 dollars. Finance and insurance gross profit was 171.4 million dollars, with profit per vehicle retailed of 2,216 dollars compared with 2,084 dollars. Parts and service revenue grew 6 per cent to 634.6 million dollars, and its gross profit rose 5 per cent to 374.2 million.

Segments and the first half

The company reports two segments. Dealerships produced segment operating income of 196.9 million dollars, down from 232.1 million, while Total Care Auto increased to 21.1 million from 18.5 million. For the six months to 30 June 2026, net income of 302.4 million dollars was higher than 284.9 million a year earlier, helped by a net gain on dealership divestitures of 125.8 million dollars compared with 10.1 million. That means first-half earnings were supported by disposals rather than by stronger operating income, which was 413.4 million dollars against 491.7 million.

Balance sheet and capital returns

Long-term debt, including the current portion, was 3,457.6 million dollars at 30 June 2026, down from 3,572.0 million at the end of 2025. The company's transaction-adjusted net leverage ratio stood at 3.4 times, compared with 3.2 times at 31 March 2026. Liquidity was 966 million dollars, comprising cash, short-term investments and floorplan offset of 154 million plus 812 million of floorplan and revolver availability.

Share repurchases continued. Asbury bought about 668,000 shares for 131 million dollars in the second quarter and about 1.35 million shares for 278 million dollars in the first half, leaving roughly 322 million dollars of authorisation. The release also said about 70 per cent of stores had moved to the Tekion dealership management system, with the rollout expected to finish this autumn.

Disposal Gains Prop Up the First Half While Margin Pressure Persists

The results show a retailer whose volumes and revenue held up while the profitability of new-vehicle sales weakened, partly offset by used cars, service and finance and insurance. That mix makes earnings more dependent on the cost base and on non-vehicle income streams than a year ago. Leverage rose to 3.4 times from 3.2 times.

The release contained no financial guidance and no dividend information. Adjusted measures exclude certain items. Third-quarter results had not been published as of 13 October 2026.